The Sargasso Sea
4 home open weekends into the New Year, multiple offer scenarios, 6 sales and counting and deals in the pipeline ready to be completed.
This is my market today in 2018. So much activity.
The market is split into a number of sections of clear demand at present.
The biggest demand by far is for ready to move into, family sized homes. The catch is they must be well presented – on trend, or have a substantial land holding. The holy grail of course is the quality family sized home with all the fruit on a big block. Buyers will literally move mountains to secure these rare opportunities.
Next is easy retain and subdivide properties. Mum and Dads eager to get ahead can tackle these as well as traditional developers and builder developers.
The renovated character (1920 -1940) front strata home (approx 290m2 of land) is absolutely in demand. Driven by aspirational young professionals, who value the nostalgic value of these homes and the small lot lifestyle opportunity.
Equally if an agent can deliver to the market three bedrooms, two bathrooms, in a neat ready to live-in package, within walking distance of the cafe strip under $650,000, the market will fall over itself to buy. This is simply an affordability and value proposition. There seems to be a large chunk of young professional Buyers with this as their upper limit.
With this segmented demand comes opportunity. There are gaps in the market. Pockets of stillness. Like the Sargasso Sea, properties become becalmed with no buyer activity. Astute purchasers can fill this void like air rushing into a vacuum.
Number 1 opportunity is certainly older style 1×1 and 2×1 apartments and villas close to the city. Selling below replacement cost. I still struggle to understand what the pool of first home buyers are thinking? This stuff is screaming value!
From $160,000 and they are in their own home! This type of first property is low cost on the maintenance front, it is close to all amenities and the majority of workplaces (low, low commute costs!), it allows for easy life changes. Want to travel for a year? Rent it out and just go!
Number 2 opportunity has to be the 3×1 villa market close to the city. With 25% price decreases over the last three years, the value for a freestanding home, close to the city, is outstanding.
Number 3 is anything that requires work. The marketplace is overlooking the ugly ducklings. Our desire for instant gratification has made us fussy. For the clever buyer this is a massive loophole in the marketplace. Look for well located homes, structurally A1, plenty of square metres of living and decor your single sleazy Uncle likes (because he saw the same shag pile carpets in a movie once…). Remember you can tidy cosmetic stuff up over time.
All this being said you all should have bought last year – and you should have. Winter 2017. That was the bottom. But it is far from too late.
Do your homework, get on a busy local agent’s Buyer Match Service and get a direct feed to new stock – often before it goes online.
Good luck!
Derek Baston
Baston & Co. Property
